Tuesday, February 07, 2006

Silver Futures

Silver futures are a way of investing in what you think silver is going to be worth sometime in the future. It is a bet that the value of silver will either increase or decrease over a specific period.

Silver is sought after as a valuable industrial commodity in many varied industries as well as because of it’s aesthetic appeal. Silver coins bullion, especially silver coins, have been used and collected by man for thousands of years. Whereas silver futures can result in a loss if a wrong call is made, the purchase and ownership of actual silver guarantees that you will have the value of the silver all the time you actually own the silver coins or bars.

Apart from the occasional spike, silver has held a stable value for 200 years and is likely to continue doing so.

Currently it is on the rise and if one is investing in silver coins one also has the added bonus of the increase in the value of the coins due to rarity and other factors such as aesthetic appeal and demand for the coins.

Another advantage that holding actual silver over a certificate is that the certificate of silver as in stocks, shares options or futures may incur some tax considerations. This may also apply to silver ingots which are considered an investment commodity. However silver coins have a face value assigned to them and are valid coins which can be used as legal tender and so have no tax considerations. The smaller bars of course rather than the larger ingots, generally do not incur any tax except in the UK where some may incur VAT at the point of purchase.

This can be important when buying and selling rare coins that increase in value during the time you hold them.